A retail store controls its inventoried items using the reorder point method; however, the shelf space for these items is limited. (Retailers allocate a certain amount of shelf space to each item in the store.) Orders are placed on a central distribution center for replenishment. A typical item in the store might have the following data.

What order quantity should be used so that the shelf space restriction is not exceeded?

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Demand forecast, boxes/week Forecast error (s), boxes/weeka Lead time, weeks Annual carrying cost, percent/yr. Item value, dollar/box Ordering cost, dollar/order Maximum shelf space for item, boxes In-stock probability Normally distributed 123 19 17 1.29 1.25 250 93% Prorated order cost for mulnple ite